As a lot of posts have already covered, Hulu and YouTube are really very different sites, with the only common thread between them being that they both stream video. In terms of what they offer, each has a different aim.
YouTube is, first and foremost, about accessibility. Accessibility in terms of allowing anyone to upload any content (copyright/content issues notwithstanding),no matter how terrible the quality is. I've noticed that even my phone has an option to record video to upload directly to YouTube, and I think that's a real testament to the overall atmosphere of YouTube.
Some companies, notably record labels, have been making more professional use for distribution of music videos, public domain films or advertising-funded copyright content, but the bulk of YouTubes videos seems to be user-submitted. Hulu itself has even uploaded clips of some of their shows on YouTube to try to bring people over to their site.
Hulu's approach is more about professionally-generated content. I watched an episode of The Simpsons on it, and it was basically just like watching one on television, except there was only one ad per commercial break. The tradeoff for mandatory advertising is that they offer free on-demand TV programs (Or other copyrighted content, like SNL skits) with a consistently high picture quality.
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